The Association of Hospital Characteristics With Medicaid Managed Care Hospital Prices

OBJECTIVE: To examine the association between various hospital characteristics and Medicaid facility prices for several routine procedures. STUDY SETTING AND DESIGN: We conducted a cross-sectional study of facility claims data from Elevance Health-affiliated Medicaid plans from 22 states plus D.C. We estimated Poisson regression models where the outcome was facility allowed cost ("price") for procedures of interest, and the exposures were hospital characteristics, including children's hospital, critical access hospital (CAH), rurality, system affiliation, teaching designation, for-profit, religious affiliation, government ownership, and hospital size. We report incidence rate ratios (IRRs) from the regression estimates. DATA SOURCES AND ANALYTIC SAMPLE: We analyzed 2021-2023 facility claims for 11 routine procedures in the outpatient or emergency department (ED) settings, including tympanostomy, colonoscopy, and ED evaluation and management (E/M) Levels 2-5. The claims were joined with data from the American Hospital Directory to identify hospital characteristics. The study included 2,250,325 children and 2,341,063 adults who received at least one of the procedures of interest. PRINCIPAL FINDINGS: The largest price differences were at children's hospitals and CAHs. For all child procedures, prices were higher at children's hospitals relative to other acute care hospitals: the largest estimate was for ED E/M Level 2 (IRR = 2.51; 95% CI, 2.14-2.95). Children's hospital estimates represented 93%-151% higher prices for ED procedures and 23%-48% higher prices for outpatient procedures. CAHs had higher prices for almost all procedures: for children the largest estimate was for tympanostomy (IRR = 1.78; 95% CI, 1.45-2.18), representing 78% higher prices, and for adults the largest estimate was for MRI (IRR = 2.43; 95% CI, 2.13-2.76), representing 143% higher prices. Results were mixed for other hospital characteristics. CONCLUSIONS: This study suggests much higher Medicaid managed care facility prices at children's hospitals and CAHs for several routine procedures. More research is needed to understand what is driving the observed differences in hospital prices.